Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Levelling Up, Housing and Communities, what recent progress his Department has made on bringing forward legislative proposals to reduce ground rent to less than a peppercorn.

The Government has committed to making enfranchisement cheaper for leaseholders by reforming the process of valuation they must follow to calculate the cost of extending their lease or buying their freehold. We will abolish marriage value, cap ground rents in the calculation, prescribe the rates to be used and introduce an online calculator.

Leaseholders will be able to extend their lease with zero ground rent on payment of a premium. The length of a statutory lease extension will increase to 990 years, from 90 years (for flats) and 50 years (for houses).

The Government has already legislated via the Leasehold Reform (Ground Rent) Act 2022 to protect future leaseholders. The Act will mean that if any ground rent is demanded as part of a new residential long lease, it cannot be for more than one literal peppercorn per year.

We understand the difficulties some existing leaseholders face with high and escalating ground rents. This is why we asked the Competition and Markets Authority (CMA) to investigate potential mis-selling of homes and unfair terms in the leasehold sector, which has resulted in commitments benefitting over 20,000 leaseholders. The CMA continue to engage with a number of firms and we urge other developers to follow suit.

We have been clear about our commitment to addressing the historic imbalance in the leasehold system. We are due to bring forward further leasehold reforms later in this Parliament.